New Report Says Hollywood Is Holding Back Its Best Content From The Web

Technophiles who think that the Internet is going to topple Hollywood studios, TV networks, and cable companies have their heads up their asses. That’s what the analysts at Bernstein Research say — in more polite language, of course — inside the 80-page transcript out today from their confab this past Monday called “Web Video… Friend or Foe And To Whom?” The answer, it seems, is that Big Media can put the brakes on progress long enough to figure out how they’ll get paid.

For example, Hollywood won’t give its best stuff to web video on demand services such as Apple or Amazon. Cable VOD pays the studios more. So they’ll also protect the premium network business because “getting a check every month from HBO or Starz or Showtime is a nice way to adjust your risk in every movie,” Bernstein’s programming analyst Michael Nathanson says. Cable operators will slow the migration to Web video by ditching the flat monthly Internet fee and charging people for how much they use. “Consumers would lose the economic incentive to undermine the old models,” Bernstein’s cable and telecom analyst Craig Moffett says.

Right now, the average American family spends about 35 cents per hour to watch TV. That would rise to “hundreds of dollars a month,” Moffett says, if families had to pay the prices that iTunes charges for each show. Meanwhile, the rush in media to put everything on the Web is subsiding. “A year and a half ago, everybody was talking about, what did we learn from music? And the lesson seems to be we’ve got to get out there quickly,” Moffett says. “Suddenly, in the last six months, the debate and the conversation has shifted to: what did we learn from newspapers? — and God help us if we go down that same path. Let’s not make those same mistakes.”

39 Comments

wackiland • on Jun 18, 2009 10:37 pm

And this is what all the SAG holdouts were fighting about? Someone should make this required reading for all the Membership First / Vote No people who made the rest of the industry sit on hold while they listened to themselves pontificate.

Thanks a bunch, guys!

SAG Actor • on Jun 18, 2009 10:37 pm

I’m definitely holding back MY content from the web. Have you seen the contract we just approved? Correct me if I’m wrong, but it looks like it’s completely up to the production whether or not it wants to pay us at all. No thanks.

michelle t • on Jun 18, 2009 10:37 pm

I’d agree with the report except that I thought ABC just joined Hulu. That doesn’t seem like shying away from the net at all.

And once again, “The Internet” gets reduced to “Web Video.” There are some really great web video shows. And there were some really fun films that ran in nickelodeons in 1907.

But how long did that era last? And how quickly did the big fish Edison get driven out of the business.

Hey, dinosaurs! Here comes the comet.

X • on Jun 18, 2009 10:37 pm

I need a bit of education here – can someone comment exactly on the mistake of newspapers referenced? i am assuming this is referencing the weakness of ad buys in newspapers these days across the board which is crippling all newspapers.

but is this a result of most papers going digital or just that people dont buy newspapers like they used to because they opt for cnn or bbc on the web?

whatever the exact reason, for it seems to be a complex one, how does it directly relate to the future of new media – or the “mistakes” people in broadcasting are attempting to avert? it seems to be comparing apples and oranges to me. thoughts?

Agreed. Adopting the “everything is free on the Internet” model would be a diaster. John Malone was interviewed last month at the All Things D conference and touched on the challenges of trying to monetize content on the Internet. Barry Diller recently stated the Internet will start to transition away from the “free” model.

For premium content, either pay a fee or provide your consumer profile and agree to receive premium targeted ads base on your profile (which you can’t skip over – no complaints).

i agree • on Jun 18, 2009 10:37 pm

Come on, really? People who think this are idiots. If people really think producers are going to put great content online are delusional when they can make a lot more money on DVD, TV or Theatrical.

Scuttlebutt • on Jun 18, 2009 10:37 pm

With all due respect to the analysts at Bernstein there’s already a bill introduced in the House on Tuesday by Rep Eric Massa (D-NY) H.R.2902 the Broadband Internet Fairness Act which you can read here

which is taking aim at the cable companies for price gouging with bandwidth throttling or capping i.e. “charging users by how much they use” and otherwise forcing users to buy services they don’t want (overpriced and poorly serviced cable TV & satellite) to get the services they do want (content online) aka the much hyped “TV Everywhere” model.

Do the content making divisions of the same conglomerates want to see similar legislation introduced prohibiting them from gouging consumers on the supply side? Because we in the public can make that happen.

Sorry but with new legislators and a new administration looking into anti-trust issues in the tech industry, it wouldn’t be hard to convince them to have a closer look at the old school content providers while they’re at it.

Sean Foushee • on Jun 18, 2009 10:37 pm

Right. Hold back your content. Starve the consumer base. That won’t have an effect on piracy at all!

/sarcasm

Seriously, why is it so hard for these idiots to realize that the more open and honest they are with their consumers the more honest the transaction will be? Don’t claim that iTunes is the problem when the studios are the ones making the deals on the price (or in most cases wanted more), especially when most of these loons want to charge more for a digital download than the DVD release!

Put your content online immediately after the first airing for a fair price and you’ll be surprise how your consumer base responds.

Anonymous • on Jun 18, 2009 10:37 pm

Anyone thinking that people are going to pay EVEN MORE for TV than they already do is patently insane. Cable companies deliver, hands down, the most wretched quality relative to cost of almost any product I can think of. Satellite is better but they still play in proximity to the cost margins established by the cable companies. Things like FIOS are incredible but will be fought every step of the way by the established players and face a long road to achieve critical mass.

Toss in that these companies are also largely in bed with each other and control internet speed availability and costs (USA is nearly the worst in the civilized world) and it’s such a giant, cynical clusterfuck that it’s amazing we can even consider what options the future might hold.

I always felt that what this report is stating is pretty obvious and apprent to anyone trying to use the services it discusses. Online streaming is great but it’s still lightyears away from being as easy to use on a TV as it needs to be to get traction, nevermind the people that are content watching stuff on laptops and mobile devices. It is the future that’s already here…..on the other side of an impenetrable pane of glass.

Analysts often have a reputation for talking absolutely ignorant twaddle from what people in an industry or normal people think.

In this case, the part of the equation that’s been forgotten is that, for content producers, it’s not a digital choice between Comcast and iTunes, but between paid and Bit-Torrent and Rapidshare and Joox.net et al for free and without compensation.

Paid offers virtue and better quality and access, unless it doesn’t, where most people will then be happy to give up their moral rectitude, Which is all the more easier when consumers feel they’ve already been screwed by the big corporations and held prisoner by them (in price and service) before they had these alternative choices.

The legacy distribution industries need to realise that those who work against their interests are far more clever, quicker, younger, popular, inventive and rarely do they do what they do for money. -So the only way to beat them would be to do so (at least partially) on their terms.

Somebody finally had to say it; and it’s not just Hollywood. Most of us don’t put anything on the web that we’re not prepared to kiss goodbye.

Anonymous Genius • on Jun 18, 2009 10:37 pm

Me thinks Hollywood is the one with its head up its ass. The Internet *will* topple the old models simply because of the natural rush towards “free content” that the new technologies allow. Itunes is the monster that the content creators acknowledge, but Limewire and others, which allow utopian-style free music/movies etc. that empower consumers … are the boogiemen who they should fear.

Content creators must devise new revenue models that work with the technologies, instead of trying to fight them. We can’t turn back time, or the hands of evolution.

Stupid people • on Jun 18, 2009 10:37 pm

These people are idiots. Oh yes we wouldn’t want to happen to newspapers happen to film? Duh

I don’t think inreasingly ecoconscious consumers with suddenly infinite news choices for free passing up overpriced news mags and paper subscriptions could have been avoided. Ever hear of the term technological advancement?

What do they think the next decade will look like? Ever hear of Moore’s law? It’s the reason it’ll take 5 seconds in ten years to dload a movie that will be untrackable and there will be a rush of indies – film will get it’s own long tail!

Iptv will make YouTube look like NBC in that no one will be watching it and instead of yr own webpage, fbook page you’ll have yr own digital channel

I’m not sure why these people are making such boldly dumb predictions based on nonsensical and false assumptions but I bet they got paid a lot for being so off base and won’t ever have to face any consequences for it

Chris • on Jun 18, 2009 10:37 pm

Where is this transcript and its 80 pages? Anyone have a link?

crashcart • on Jun 18, 2009 10:37 pm

Wow. Talk about heads up asses. Someone needs to tell these folks about the pirate bay.

InformedViewer • on Jun 18, 2009 10:37 pm

what did we learn from newspapers?
How to go out of business?

The good old days are gone – say what you will about the music industry, but the record labels aren’t going out of business, just having to adjust their ancient business practices to ensure their survivor.

Newspapers are a dead model…there is no newspaper thriving, they’re just waiting for the death toll to strike.

I think this is going to be a strong trend. Ultimately, premium content is just that – Premium. No reason to give it away for free. The buzz around content on the web is subsiding, and honestly, I know that I’d pay for HBO and I love my DirecTV. I feel I get good value out of them. And honestly, I wouldn’t want to watch the shows I get on my TV on my laptop. That being said, web video is for real. It’s just that different content will live there — some promotional, some viral home video, some professional short form – one thing is for sure that there will be eyeballs. In both places.

PB • on Jun 18, 2009 10:37 pm

I’ll tell you what I learned from the music industry. Artists can sell their own album – online – themselves. The internet is a direct route from content creators to people. No bankers in suits needed.

If I were the studios, with the way I’ve been treating creatives for what, 80 years now? I’d be very afraid.

DH • on Jun 18, 2009 10:37 pm

“New Report Says Hollywood Is Holding Back Its Best Content From The Web”

I can only assume they are holding it back from cinema screens as well.

Matt Mulhern • on Jun 18, 2009 10:37 pm

This is the new normal, so I read, so I see, and so I’m told. Wonder why Dule’ Hill was so UFS? Watch this. This is he and his co-star from the USA series, “Psych,” in character, shilling for Kia. It makes it seem to the watchers of this USA series “Psych” that they haven’t even left the show. Now, I know we’re all whores, on some level, and I know all of us reading this and watching this, if WE were one of the leads on “Psych” and the producers said “hey buddy, here’s a little spot we’re going to have you and Dule’ doing in character for Kia” that, in all honesty, we might just say “whatever you say boss.” Let’s acknowledge we all have our levels of whore-ish-ness. And it’s not like “Psych” is Chekov.

However, IF you were wondering what it’s actually going too look like, doing ads in character for products, this is it. I assume MAYBE cause they’re the leads, they get some green for this? MAYBE? But here’s the leads of a series doing a straight up-commercial endorsement, in character, as if they’re in the show. So, since neither of these dudes are exactly house-hold names, at the very least it means they aint doin any car commercials. Kia is now, officially, a conflict.

Hollywood can’t “hold back” any content from the web. The only thing that’s saved the copyright industries thus far is that 90% of their consumers haven’t yet figured out BitTorrent.

Thus, “[putting] the brakes on progress long enough to figure out how they’ll get paid” basically means pressuring gov’ts and ISPs to encrypt and throttle bandwidth in order to maintain the status quo (i.e., making sure we pony up $10 or so for that copy of Land of the Lost). Yeah, good luck with that.

The first big-enough-pocket firm to leave the smoke-filled room, forego the analog nostalgia and figure out how to deliver desirable, high-quality content online at a now-realistic price point (NB – it ain’t $10 a pop) will win the first half of the century. Hands down. Every other old media firm will deserve their fate.

Matt Mulhern • on Jun 18, 2009 10:37 pm

Two in a row, so perhaps no play, but I’ll try: I am 48. I LOVE using my computer. I have “visited” Pirate Bay, just to check it out. Also, Limewire. They are both an ENORMOUS pain in the ass, at least on a Mac. Maybe that’s all it is, but, as to mass piracy via these sites? I guess there’s an awful lot of intensely patient 17 year old tech geeks doing this for free, cause I sure as hell aint. I’m at the age where the law actually means something to me, and it a HUGE pain in the ass. I already said that. It bears repeating.

I honestly don’t know where it’s going. Truth is – no one does. Whatever 30 year old or 25 year old who wrote the post(s) above doesn’t either, despite the bravado. If they did, they’d be pulling down half a million a year at some firm instead of typing from their Mom’s house. O.K., maybe their apartment. That they share with 4 other dudes. Been there.

Look, the comparables are out there, if you care to think outside the box:

The West. People did WHATEVER THE FUCK THEY WANTED. Until, of course, they couldn’t. Then, they didn’t. Cause there were cops and shit.

Piracy and “I can bounce a stolen signal off my left nut and watch ‘The Simpson’s’ for free – you people are dinosaurs?”

Same thing. All the tech geeks, especially the young ones, think they’re SO clever. But they’re not. The two dudes from Pirate Bay just had their appeal turned down, and guess what? They’re going to fucking jail. And when they come out? They’re going to hide under their bed covers for the rest of their lives.

There will be consequences, and all the “wild west – you just don’t get it old people” rhetoric will turn into “yes officer” as soon as the cyber-cops show up. And they’re coming, Junior. There’s billions of dollars at stake. These people may be dumb, but they’re not stupid. You should be trying to get into the anti-piracy business. That’s where you can MAKE a lot of money by being your clever selves.

Anonymous • on Jun 18, 2009 10:37 pm

Rubbish, the music industry made the same mistake. Of course you can hold back licenses on your best content for legal services that exist. If the studios or networks think that they can put the breaks on piracy and therefore consumer habits to consume what they want when they want they have another thing coming.

Big Z • on Jun 18, 2009 10:37 pm

That’s like an oxy-moron. There is no such thing as “good” content in regards to tv shows. People act like our lives revolve around this crap and it doesn’t. If it does, you should go get a mental evaluation immediately.